Coast Fed eyes moving operations unit to Burbank; it's negotiating relocating center from Granada Hills.

Coast Federal Bank is negotiating to relocate its operations center from Granada Hills to a new facility -- potentially totaling 450,000 square feet and employing as many as 1,200 people -- on a site previously slated for a multi-tenant office development called the Airport Center Project, near the Burbank airport.

Coast has outgrown its existing 200,000-square-foot facility and last December started looking for a new 300,000-square-foot home that could be expanded by another 150,000 feet, confirmed George Packer, vice president/real estate services at Coast.

The culmination of the search could be a rare major commercial development project amid the overbuilt local office market and the stifling construction credit crunch.

Coast has looked at four sites in Burbank redevelopment districts, said Packer, but negotiations now focus on property the city acquired from Lockheed Corp. four years ago. It was designated for the Burbank Airport Center Project, to be built by the development firm Wolff Sesnon Buttery White -- just across Hollywood Way from the Burbank-Glendale-Pasadena Airport.

If the downtown L.A.-based Coast Savings Financial Corp. subsidiary's board and the Burbank City Council approve the deal under consideration, Coast Federal Bank would develop a 300,000-square-foot administration/operations center on seven acres near developer Lew Wolff's Burbank Airport Hilton hotel.

City officials said Coast also wants another three adjacent acres for a 150,000-foot expansion facility -- either on the site where Wolff has been planning to develop a headquarters for the Altium software engineering firm, or on another adjacent plot.

The city and Wolff announced last year that they had reached agreement on a plan to develop a 680,000-square-foot commercial development on the 10-acre Airport Center site, which Wolff was to purchase from the city. The first building in the project was to have been a new three-story, 120,000-square-foot headquarters building for Altium, previously known as CADAM Inc.

But Altium recently started looking around for existing space to lease, citing the stagnant economy.

"We're still evaluating our position," said Bill Tulloss, Altium director and general manager. "The changing economic situation really dictates looking at alternatives."

If Altium opts to lease existing space rather than move into Wolff's planned "build-to-suit" facility -- the scenario considered most likely by those involved -- Wolff said he will "step aside" and give away his development agreement with the city for the full 10 acres, to facilitate a new arrangement between Burbank and Coast.

"I feel the effort we put in with the city and Altium should have resulted in a project. I feel bad about that," said Wolff. "The city did so much trying to do this Altium deal, I owe them anything they want."

If Altium goes ahead with the development project, possible alternative three-acre expansion sites for Coast include adjacent Lockheed property and another parcel owned by a Walt Disney Co. subsidiary, according to Burbank City Manager Bud Ovrom.

While nothing has been finalized, the Coast deal could potentially include a land donation from the city in exchange for Coast's guarantee to employ a specific number of workers at the facility, said Packer.

Burbank Redevelopment Administrator John Ornelas confirmed a land donation was a "possibility." He said the seven acres under serious negotiations are valued at $14 to $17 per square foot -- or between $4.24 million and $5.15 million.

Packer explained that Coast has considered relocating from its present Granada Hills operations center at Chatsworth Street and Zelzah Avenue at least three times during the past decade. Coast's retail branch network shrunk from its 1987 peak of 127 branches to just 88 last year, but the company is now in another growth mode and has recently had to lease additional space outside the Granada Hills facility.

Coast's board has instructed its in-house corporate real estate executives to strike a relocation deal "if there's interest" in the 16.44-acre Granada Hills site, "and if we find a site that can accommodate us now and in the future," Packer added.

"Big box" types of retailers in particular have expressed "strong interest" in the Granada Hills site, which had housed a Treasury department store before Coast acquired it in the early 1980s, Packer continued. Cushman Realty Corp.'s Bill Puget is the listing agent on the Granada Hills property, while Cushman & Wakefield's Mike DeSantis is representing Coast in the relocation negotiations, Packer confirmed.

While Coast's corporate offices would remain at the 1000 Wilshire building in downtown L.A., the new administrative/operations facility would house much of the thrift's other critical operations, Packer explained.

While Coast ideally prefers to strike a Burbank development deal and dispose of its Granada Hills property "as simultaneously as possible," construction of a facility by a Coast project management team would likely take 14 to 18 months to complete, Packer estimated.

"So even if we strike a deal to sell the property and close escrow, we'd still have to lease it back (from the buyer) for a while," he explained.